Category: Supplier Report

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Supplier Report: 2/14/2020


Photo by Finan Akbar on Unsplash

Investment company SoftBank is having trouble finding investors for the second wave of their “Vision Fund”. The company has taken heavy criticism for their investment strategies that some financial experts attribute to the over-valuation of companies like Uber and WeWork.

With less capital investments available, will the over-valuation of unprofitable tech companies end or will something or someone else fuel the next bubble?

Meanwhile Jeff Weiner is stepping down as LinkedIn CEO (he is still staying with the company) and Seeking Alpha is questioning why IBM didn’t select Jim Whitehurst as their next CEO.

Acquisitions/Investments

  • Koch Industries acquires Infor in deal pegged at nearly $13B

    Infor, which makes large-scale cloud ERP software, has been around since 2002 and counts Koch as both a customer and an investor, so the deal makes sense on that level. Koch was lead investor last year in a $1.5 billion investment, wherein the company indicated that it was a step before going public.

    It’s not clear if that is still the goal, as sources suggested that staying private might provide the company with more capital flexibility in the future. Daniel Newman, founder and principal analyst at Futurum Research, says staying private longer could benefit Infor in the long run.

    https://techcrunch.com/2020/02/04/koch-industries-acquires-infor-in-deal-pegged-at-nearly-13b/

  • New SoftBank Tech Fund Falls Far Short of $108 Billion Fundraising Goal

    Hailed by SoftBank last summer as a $108 billion sequel to its $100 billion Vision Fund, the new pool could end up being less than half that size, with nearly all of its capital coming from SoftBank itself, the people said.

    A failure by SoftBank to raise a big new fund would reverberate across the tech startup world. Dozens of companies from ride-hailing giant Uber Technologies to food delivery company DoorDash Inc. got big boosts from the fund’s nearly $90 billion two-year spending spree.

    Less money to invest could mean cuts to SoftBank’s 500-person investing staff.

    https://www.wsj.com/articles/new-softbank-tech-fund-falls-far-short-of-108-billion-fundraising-goal-11581100669

  • Elliott Management Builds More Than $2.5 Billion Stake in SoftBank

    Elliott Management Corp. has quietly built up a more than $2.5 billion stake in Japan’s SoftBank Group Corp. 9984 7.13% and is pushing the sprawling technology giant to make changes that would boost its share price, according to people familiar with the matter.

    Founded by billionaire Paul Singer, New York-based Elliott is known as a formidable activist investor, often seeking to influence company management. SoftBank is one of Elliott’s largest bets, according to people familiar with the matter. At current prices, the investment would be equivalent to about 3% of SoftBank’s market value.

    https://www.wsj.com/articles/elliott-management-builds-more-than-2-5-billion-stake-in-softbank-11581015340

  • HPE acquires cloud native security startup Scytale

    HPE announced today that it has acquired Scytale, a cloud native security startup that is built on the open-source Secure Production Identity Framework for Everyone (SPIFFE) protocol. The companies did not share the acquisition price.

    Specifically, Scytale looks at application-to-application identity and access management, something that is increasingly important as more transactions take place between applications without any human intervention. It’s imperative that the application knows it’s OK to share information with the other application.

    https://techcrunch.com/2020/02/03/hpe-acquires-cloud-native-security-startup-scytale/

Artificial Intelligence/Robotics

  • Laszlo Bock Thinks Machine Learning Can Make Work Better

    “There are seven billion people on this planet, and work sucks for most of them,” Mr. Bock adds. “How do you make it better without waiting 200 years for it to get better? What if you could actually drive business outcomes while also making work better?”

    His answer to that what-if is Humu Inc., a behavioral-change startup whose mission is to “make work better everywhere through machine learning, science and a little bit of love.” Mr. Bock, 48, serves as Humu’s CEO. He started the company in 2017 with two of his former Google colleagues, Wayne Crosby and Jessie Wisdom. Based in Mountain View, Calif., Humu seeks to expand the kind of data-driven approach to personnel management that Mr. Bock developed during his 10 years as Google’s head of human resources (or as Google calls it, “people operations”).

    https://www.wsj.com/articles/laszlo-bock-thinks-machine-learning-can-make-work-better-11580492585

Cloud

  • Oracle Adds Data Centers in Five New Countries to Its Cloud Platform

    This week Oracle announced the addition of five new regions to its Generation 2 cloud platform across the globe. This brings the number of Oracle cloud data center availability regions to 21, with a total of 36 to be available by the end of the year, which is when the company has said it will have more global data center hubs than Amazon Web Services.

    The new regions are in Jeddah, Saudi Arabia; Melbourne, Australia; Osaka, Japan; Montreal, and Amsterdam.

    https://www.datacenterknowledge.com/oracle/oracle-adds-data-centers-five-new-countries-its-cloud-platform

Security/Privacy

  • Researcher: Backdoor mechanism still active in many IoT products

    According to Yarmak, the backdoor can be exploited by sending a series of commands over TCP port 9530 to devices that use HiSilicon chips and Xiongmai firmware.

    The commands — the equivalent of a secret knock — will enable the Telnet service on a vulnerable device.

    Yarmak says that once the Telnet service is up and running, the attacker can log in with one of six Telnet credentials listed below, and gain access to a root account that grants them complete control over a vulnerable device.

    https://www.zdnet.com/article/researcher-backdoor-mechanism-still-active-in-many-iot-products/

Infrastructure/Hardware

  • Apple fined $27 million in France for throttling old iPhones without telling users

    A couple of years ago, Apple released an iOS update (10.2.1 and 11.2) that introduced a new feature for older devices. If your battery is getting old, iOS would cap peak performances as your battery might not be able to handle quick peaks of power draw. The result of those peaks is that your iPhone might shut down abruptly.

    While that feature is technically fine, Apple failed to inform users that it was capping performances on some devices. The company apologized and introduced a new software feature called “Battery Health,” which lets you check the maximum capacity of your battery and if your iPhone can reach peak performance.

    And that’s the issue here. Many users may have noticed that their phone would get slower when they play a game, for instance. But they didn’t know that replacing the battery would fix that.

    Some users may have bought new phones even though their existing phone was working fine.

    https://techcrunch.com/2020/02/07/apple-fined-27-million-for-throttling-old-iphones-without-telling-users/

  • The Coronavirus Impact on Hardware Startups

    It seems like most people are expecting factories to open on 2/10 as planned. However, the expectation is being set that production will take two weeks to ramp back up to normal. And, there is some concern that larger companies will likely exert pressure to be at the front of the line.

    Another problem at this point is movement into and out of China. The Chinese border with Hong Kong is only open at a few places and many are afraid to enter China right now for fear that they won’t be able to leave.

    Everyone anticipates a big logistics clog once things start shipping, which will introduce delay and cost, although the magnitude of this is unknown.

    Finally, the downstream (or upstream – I never get that right) impact of long lead time items will add another wrinkle once people understand the volume and timing constraints when things settle down.

    https://feld.com/archives/2020/02/the-coronavirus-impact-on-hardware-startups.html

    Yes – I posted this video twice. Watch it. Subscribe. I might make more.

Other

  • Status Quo For IBM Is Unsustainable. An Acquirer Would Treat Its Assets Better

    The fact that Jim Whitehurst was given the consolation prize of President is all you need to know about where the board is, in regard to a sense of urgency about the going forward. Whitehurst was the erstwhile CEO of Red Hat; he is not some “wet-behind-the-ears” naive tech company founder. Before Red Hat, Whitehurst was the COO of Delta in what was very trying times going into the teeth of the great recession. Whitehurst understands how to perform while playing hurt. Whitehurst also knows how to grow a tech business. Red Hat was an admired company before IBM scooped it up by paying top dollar. I am sure that during the courtship Rometti whispered in Whitehurst’s ear all kinds of promises including the fact that she will retire soon and IBM may very well be his realm. That is what a lot of people who grew up in technology, in earlier more genteel times, hoped. IBM would finally get its footing by reaching outside and putting its house in order. This “business-as-usual” coronation, promoted a 40-year IBMer, who has no corporate leadership experience, no experience in restructuring, no experience in building a tech company. His claim to fame is that he bought Whitehurst’s company for top dollar? Really?

    https://seekingalpha.com/article/4322576-status-quo-for-ibm-is-unsustainable-acquirer-treat-assets-better

  • IBM, Marriott and Mickey Mouse Take On Tech’s Favorite Law

    An unusual constellation of powerful companies and industries are fighting to weaken Big Tech by limiting the reach of one of its most sacred laws. The law, known as Section 230, makes it nearly impossible to sue platforms like Facebook or Google for the words, images and videos posted by their users.

    The companies’ motivations vary somewhat. Hollywood is concerned about copyright abuse, especially abroad, while Marriott would like to make it harder for Airbnb to fight local hotel laws. IBM wants consumer online services to be more responsible for the content on their sites.

    But they all see an opening as both Democrats and Republicans increasingly raise their own concerns about the power of the tech industry and the law.

    https://www.nytimes.com/2020/02/04/technology/section-230-lobby.html

  • Jeff Weiner will step down as CEO of LinkedIn June 1, product head Ryan Roslansky steps up

    There is a major change ahead for LinkedIn, the social network for the working world, now with 675 million members. Jeff Weiner, who has been leading the company as CEO for the past 11 years, is stepping down on June 1, 2020. His new role will be executive chairman. Ryan Roslansky, who is currently head of product, will be stepping up to the role of CEO, while Tomer Cohen, who had been under Roslansky, is stepping up to lead the product team.

    https://techcrunch.com/2020/02/05/jeff-weiner-will-step-down-as-ceo-of-linkedin-june-1-product-head-ryan-roslansky-steps-up/

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Supplier Report: 2/7/2020

It is the end of an era with IBM’s announcement that CEO Virginia Rometty is retiring. Rometty assumed the role in 2012 and has been attempting to transform the company into a cloud and AI powerhouse. This transformation has been bumpy with IBM losing 22% value during her tenure.

But her acquisitions and steady hand may position IBM for a Microsoft-like resurgence (or she may have led the company to its final stand).

Acquisitions/Investments

  • LSI acquires S2P Solutions to solidify its SAP portfolio

    The public services transformation company LSI announced today that it will acquire S2P Solutions Ariba Cloud-based business commerce business unit on February 3rd, pending shareholder approval. With the addition of S2P, LSI will continue its leadership in delivering full ERP Cloud solutions to Regulated Industries. The focus of S2P’s business is in procurement, spend management and supplier discovery, and it is considered a leading service provider for Ariba services.

    “S2P is a champion in the procurement services market – and they have been instrumental in our strategy to deliver Ariba solutions to our SAP client base”, explained Steve Roach – CEO & President of LSI. “The ERP market is moving to the Cloud and SAP continues to lead the charge. By weaving Ariba (procurement), SuccessFactors (human resources) to the S/4H (digital core) together we are able to meet the needs of State, Local Government, Education, Utilities, Non-for-profits and Healthcare institutions. This acquisition is the next step in our journey to build out the Intelligent Public Enterprise”.

    https://www.einnews.com/pr_news/508559866/lsi-acquires-s2p-solutions-to-solidify-its-sap-portfolio

Cloud

  • Microsoft Profit, Sales Beat as Cloud Demand Persists

    Revenue in the period ended Dec. 31 rose 14% to $36.9 billion, marking the software maker’s 10th straight quarter of double-digit sales growth. Analysts on average had predicted $35.7 billion. Fiscal second-quarter profit was $11.6 billion, or $1.51 a share, Microsoft said Wednesday in a statement. That compared with the $1.32 per-share estimate of analysts polled by Bloomberg. Shares rose 4% in late trading.

    Chief Executive Officer Satya Nadella has been trying to narrow the gap in cloud infrastructure with market leader Amazon.com Inc., in both technical capabilities and the caliber of customer it can attract for its Azure products and services. Microsoft’s recent wins include a massive contract with the Pentagon, for which it beat out front-runner Amazon, and a cloud deal with accounting giant KPMG LLP. Microsoft is also pulling in more revenue from Office 365, with companies such as KPMG and Ikea upgrading to the internet-based productivity software. Azure revenue in the recent period rose 62% and Office 365 sales to businesses increased 27%.

    https://www.bloomberg.com/news/articles/2020-01-29/microsoft-profit-sales-beat-as-cloud-demand-persists

Security/Privacy

  • FCC: Wireless carriers violated federal law by selling location data

    Back in 2018, it came to light that carriers sell their customers’ real-time location data to aggregators, which then resold it to other companies or even gave it away. Last year, a Motherboard report also revealed that bail bond companies and bounty hunters have been buying people’s location data for years, allowing them to use that information to track their targets.

    All four major US carriers promised to stop selling customer location data to aggregators after the information first came out. The companies made good on their word, though it took them a year to do so: They informed FCC Commissioner Jessica Rosenworcel that they had already halted sales to aggregators after she requested for an update in 2019.

    https://www.engadget.com/2020/01/31/fcc-carriers-violated-federal-law-selling-location-data/

  • Hackers are selling card info stolen in last year’s Wawa breach

    If you purchased anything at the East Coast gas station and convenience store chain Wawa between March and December last year, there’s a chance your credit and debit card info is being sold on the dark web. Earlier this week, fraud intelligence company Gemini Advisory discovered stolen payment card data being uploaded to Joker’s Stash, an online cybercrime marketplace. It seems the data was obtained during the Wawa breach discovered in December.

    As you may remember, last month, Wawa revealed that malware had been swiping customers’ payment card info, possibly since March. It’s believed that 850 stores may have been hit, exposing 30 million sets of payment records, making it one of the largest payment breaches of all time. Cardholders in the US, several Asian countries, Europe and Latin America may have had their data stolen.

    https://www.engadget.com/2020/01/30/wawa-breach-stolen-data-sold-online/

  • Antivirus company shuts down its data-harvesting arm after getting caught red-handed

    The reports, which were the result of a joint investigation between Motherboard and PCMag, detailed how Avast was collecting user browsing data via its antivirus software. This data included Google searches, location lookups, visited URLs along with precise time stamps, and in some cases even specific searches made on porn websites. Although Avast claimed that individual users could not be identified from this data, Motherboard spoke to experts who said that this could be possible in some cases.

    Jumpshot claimed to have data from as many as 100 million devices, and it listed some of the world’s largest companies among its clients, including Google, Yelp, Microsoft, and Pepsi. Jumpshot would package this data up into different products, one of which was its “All Click Feed,” which would allow its clients to see all user clicks on individual domains (such as Amazon.com). These clients reportedly paid millions of dollars for Jumpshot’s products, which often included precise browsing data.

    https://www.theverge.com/2020/1/30/21115326/avast-jumpshot-subsidiary-suspended-data-collection-selling-ceo-blog-post

Other

  • IBM CEO Virginia Rometty is retiring

    IBM CEO Virginia Rometty, one of the most prominent female leaders in tech, is stepping down on April 6th, 2020. She will still serve as Executive Chairman of the Board through the end of the year, but she’s retiring completely after that. Rometty will be replaced as CEO by Arvind Krishna, who currently runs the company’s cloud business and who was a key figure in IBM’s Red Hat acquisition. She called Krishna “the right CEO for the next era at IBM.”

    https://www.engadget.com/2020/01/30/ibm-ceo-virginia-rometty-is-retiring/

  • WeWork Names Veteran Real Estate Executive as New Chief

    The naming of an experienced real estate executive is a clear indication that WeWork is moving on from Mr. Neumann’s strategy of building a sprawling company with lofty aims that included transforming how people work and live together. He had promoted WeWork as if it were a groundbreaking technology company set on upending its industry. The firm had also branched out well beyond office space, establishing sleek dormitories for working professionals and even a private school in Manhattan.

    https://www.nytimes.com/2020/02/01/business/wework-chief-executive.html

  • Apple is closing all mainland China stores due to coronavirus outbreak

    The coronavirus outbreak is having a tangible impact on the tech world, and Apple is serving as a textbook example of its effect. The company is closing all its retail stores and corporate offices in mainland China through February 9th out of an “abundance of caution” and in consultation from experts. Apple had initially closed three stores, but this shuts down a full 42 locations across the country.

    Key suppliers like Foxconn have said they don’t expect problems meeting production goals for companies like Apple. Caution is still the order of the day, however. Apple chief Tim Cook said that expectations for the start of the calendar year were unusually vague due to virus-related uncertainty. Sales at stores had dropped across China in recent days, even outside of the coronavirus epicenter of Wuhan.

    https://www.engadget.com/2020/02/01/apple-closes-china-stores-due-to-coronavirus/

Posted on

Supplier Report: 1/24/2020


Photo by Michael Dziedzic on Unsplash

Even though Google is under investigation for monopoly tactics, the company announced another acquisition. The search giant is set to purchase cloud sales company Pointy, which helps small companies sell their products online.

The company also announced a long-term strategy to kill browser cookies, with the aim to better protect end-user privacy (and likely unleash their own tracking-standard for advertisers).

Apple also announced an acquisition this week (AI startup Xnor.ai), but that news was overshadowed by the company’s refusal to unlock phones involved with the Pensacola shooting. Should tech companies intentionally open back doors for the government (even with the best of intentions) which could lead to much larger security issues?

Acquisitions/Investments

  • Google acquires Pointy, a startup to help brick-and-mortar retailers list products online, for $163M

    The search giant is acquiring Pointy, a startup out of Dublin, Ireland, which has built hardware and software technology to help physical retailers — specifically those that might not already have an extensive e-commerce storefront detailing in-store inventory — get their products discoverable online without any extra work.

    The companies are not disclosing the financial terms of the deal, but a source tells us it is €147 million ($163 million).

    A source notes that this was a “good outcome” because Pointy has a “one of a kind” product that didn’t really have any comparables in the market. Pointy had also managed to pick up quite a lot of traction as a small startup, working with around 10% of all physical retailers in the U.S. in certain categories (pets and toys were two of those, I was told).

    https://techcrunch.com/2020/01/14/google-is-buying-pointy-a-startup-that-helps-brick-and-mortar-retailers-list-products-online/

  • Equinix is acquiring bare metal cloud provider Packet

    Sara Baack, chief product officer at Equinix, says bringing the two companies together will provide a diverse set of bare metal options for customers moving forward. “Our combined strengths will further empower companies to be everywhere they need to be, to interconnect everyone and integrate everything that matters to their business,” she said in a statement.

    While the companies did not share the purchase price, they did hint that they would have more details on the transaction after it closes, which is expected in the first quarter this year.

    https://techcrunch.com/2020/01/14/equinix-is-acquiring-bare-metal-cloud-provider-packet/

  • Apple acquires Xnor.ai, edge AI spin-out from Paul Allen’s AI2, for price in $200M range

    The three-year-old startup’s secret sauce has to do with AI on the edge — machine learning and image recognition tools that can be executed on low-power devices rather than relying on the cloud. “We’ve been able to scale AI out of the cloud to every device out there,” co-founder Ali Farhadi, who is the venture’s CXO (chief Xnor officer) as well as a UW professor, told GeekWire in 2018.

    Xnor.ai also developed a self-service platform that made it possible for software developers, even those who aren’t skilled in AI, to drop AI-centric code and data libraries into device-centric apps.

    Those two threads of innovation are woven into the startup’s motto: “AI Everywhere, for Everyone.”

    https://www.geekwire.com/2020/exclusive-apple-acquires-xnor-ai-edge-ai-spin-paul-allens-ai2-price-200m-range/

Cloud

  • Google Cloud gets a premium support plan with 15-minute response times

    Google stresses that the team that will answer a company’s calls will consist of “content-aware experts” that know your application stack and architecture. As with similar premium plans from other vendors, enterprises will have a Technical Account manager who works through these issues with them. Companies with global operations can opt to have (and pay for) technical account managers available during business hours in multiple regions.

    The idea here, however, is also to give GCP users more proactive support, which will soon include a site reliability engineering engagement, for example, that is meant to help customers “design a wrapper of supportability around the Google Cloud customer projects that have the highest sensitivity to downtime.” The Support team will also work with customers to get them ready for special events like Black Friday or other peak events in their industry. Over time, the company plans to add more features and additional support plans.

    https://techcrunch.com/2020/01/15/google-cloud-gets-a-premium-support-plan-with-15-minute-response-times/

Security/Privacy

  • Apple Said It Is Helping In The Pensacola Shooting Investigation, But It Won’t Unlock The Shooter’s iPhones

    “We reject the characterization that Apple has not provided substantive assistance in the Pensacola investigation. Our responses to their many requests since the attack have been timely, thorough and are ongoing,” the company said in a statement. “We responded to each request promptly, often within hours, sharing information with FBI offices in Jacksonville, Pensacola and New York. The queries resulted in many gigabytes of information that we turned over to investigators. In every instance, we responded with all of the information that we had.”

    But Apple said nothing about actually unlocking the gunman’s two iPhones. Instead, it reiterated its stance on privacy.

    “We have always maintained there is no such thing as a backdoor just for the good guys,” the company explained. “Backdoors can also be exploited by those who threaten our national security and the data security of our customers. … We feel strongly encryption is vital to protecting our country and our users’ data.

    https://www.buzzfeednews.com/article/scottlucas/william-barr-apple-request-unlock-iphones

  • Google Says Chrome Will End Support for Third-Party Cookies That Track You. Here’s Why That’s Not All Good News

    So, let’s look at the good news and the bad news. If you’re a user, there’s mostly good news, because ending third-party cookies is generally good for privacy. The caveat here is that it’s not yet entirely clear how Google plans to have it both ways. Meaning, it’s not clear how Google thinks it can provide a privacy-protected browsing experience that also provides targeted ads.

    There’s also the fact that some less ethical advertisers will no doubt resort to other types of more nefarious tracking, like browser and device fingerprinting. Those technologies create a profile of you based on information sent by your browser about your device, the operating system, your location, and other unique identifiers. Safari has introduced protection against that, and it will be interesting if Google takes a similar approach with Chrome.

    https://www.inc.com/jason-aten/google-says-chrome-will-end-support-for-third-party-cookies-that-track-you-thats-not-all-good-news.html

Software/SaaS

  • Mozilla lays off 70 as it waits for new products to generate revenue

    In an internal memo, Mozilla chairwoman and interim CEO Mitchell Baker specifically mentions the slow rollout of the organization’s new revenue-generating products as the reason for why it needed to take this action. The overall number may still be higher, though, as Mozilla is still looking into how this decision will affect workers in the U.K. and France. In 2018, Mozilla Corporation (as opposed to the much smaller Mozilla Foundation) said it had about 1,000 employees worldwide.

    https://techcrunch.com/2020/01/15/mozilla-lays-off-70-as-it-waits-for-subscription-products-to-generate-revenue/?guccounter=1

  • Daily Crunch: Goodbye Hipmunk

    Founded by Adam J. Goldstein and Reddit co-founder Steve “spez” Huffman, Hipmunk was one of the first well-made “metasearch” travel sites. It scrounged up flights (and hotels/car rentals/etc.) from across myriad services like Expedia, Priceline, etc., presenting all the times and prices in one big, skimmable interface.

    Now the Hipmunk team says the website and app are both shutting down. Oh, and we’ve confirmed that Goldstein and Huffman tried to buy the company back from SAP Concur, but that doesn’t seem to have panned out.

    https://techcrunch.com/2020/01/15/daily-crunch-goodbye-hipmunk/

Infrastructure/Hardware

  • Report: Intel CPU Supply Issues Will Likely Persist Through 2020

    Intel has previously admitted to being stuck between a rock and a hard place and their CEO, Bob Swan, gave a very candid explanation for the situation they are in right now. It does, however, mean that AMD *will* be eating away more market share from Intel as OEMs and AIBs have to switch to AMD parts to maintain their volume as Intel’s foundries are running at peak capacity and cannot keep up with demand. Every chip order that Intel is not able to meet means market share gained by AMD.

    It also doesn’t help that Intel’s chips ship at a premium (and it makes no sense to kill that premium right now when demand exceeds supply) and OEMs/AIBs have to pass that cost down to consumers who may prefer to go with AMD alternatives anyways. If there is one thing we know for sure it is that 2020 is going to be a make or break year for Intel and things won’t start looking up for the company till late 2021.

    https://wccftech.com/report-intel-cpu-supply-issues-will-likely-persist-through-2020/

Other

  • Silicon Valley Abandons the Culture That Made It the Envy of the World

    Eric Schmidt, the former CEO of Google, said much the same last year. “Chinese companies are growing faster, they have higher valuations, and they have more users than their non-Chinese counterparts,” he said. “It’s very important to understand that there is a global competition around technology innovation, and China is a significant player and likely to remain so.”

    This is a full reversal of the language that tech promoters used to sell Silicon Valley–style innovation and competitiveness for decades. Saxenian has noticed the change in how the Valley describes itself, or at least in how the dominant firms do. “Advocacy of the small, innovative firm and entrepreneurial ecosystem is giving way to more and more justifications for bigness (scale economics, competitive advantage, etc.),” Saxenian wrote to me in an email. “The big is beautiful line is coming especially from the large companies (Facebook, Google, Amazon, Apple) that are threatened by antitrust and need to justify their scale.”

    This sort of talk prompts one obvious, knee-jerk response: It’s simply hypocrisy. When Google and Facebook were start-ups, their executives said start-ups were good. Now that Google and Facebook are huge, their executives say huge companies are good. It’s cynical, if not unexpected.

    https://www.theatlantic.com/technology/archive/2020/01/why-silicon-valley-and-big-tech-dont-innovate-anymore/604969/

Posted on

Supplier Report: 1/10/2020


Photo by Annie Spratt on Unsplash

Hitting goals is critical for a business, especially in the tech world. We are seeing companies trade their culture in order to hit business targets (see Google and Amazon). The media is coming down hard on Google for these shifts, but as we have seen with WeWork, the time of the unicorn darlings is over and the stock market is demanding profits once again.

SoftBank and Masayoshi Son are another root cause for this tonal shift. At the moment, many of SoftBank’s investments are performing poorly (again see WeWork and Uber). Son’s investment strategies enabled many of the wayward valuations over the last few years and a market course-correction was in order.

If a good idea doesn’t make a profit (somehow), it isn’t going to survive. Capitalism is cruel and wonderful beast.

Acquisitions/Investments

  • Here’s a Masayoshi Son Shopping List for 2020

    The numbers are so bad, you have to laugh. Uber: down 37% since IPO. WeWork: valuation cut by 80%. Wag: sold back to founders at a loss. But Son will bounce back. He has to, because he has another Vision Fund to raise and run. Instead of being cowed into humility, it’s more likely he’ll double down and make even more fantastical bets with other people’s money. To help him out, I did a multivariate analysis(1) based on past SoftBank deals to come up with a list of investments he ought to consider.

    Also:

    Saudi AramcoTo be frank, Saudi Arabia’s state oil company isn’t really the kind of thing SoftBank should be putting money into because oil is just not futuristic enough. Data is said to be the new oil anyway. But then, taking Saudi money is something many believe Son shouldn’t be doing at all in light of the murder of writer Jamal Khashoggi. Son has pledged not to abandon the Saudis — after all, they gave $45 billion to the Vision Fund — and so that commitment may as well include throwing support behind Crown Prince Mohammed bin Salman and his nation’s largest asset. Riyadh ended up settling for a $1.7 trillion market cap at IPO, after previously assuring everyone that it was worth at least $2 trillion. While it hit that figure within days of listing, the shortfall at IPO is equivalent to three Vision Funds. After WeWork’s $40 billion drop in value, Masa will feel right at home.

    https://www.washingtonpost.com/business/energy/heres-a-masayoshi-son-shopping-list-for-2020/2019/12/30/af519386-2b69-11ea-bffe-020c88b3f120_story.html

  • IBM Bet Everything on an Acquisition in 2019. Now It Needs to Grow Again.

    The Red Hat deal is just one in a decadeslong series of IBM moves to keep up with shifting technology trends. Keep in mind that IBM over the years built and later unloaded large businesses in desktop computers, laptops, printers, microprocessors, chip manufacturing, and typewriters. (Didn’t you once own an IBM Selectric?) The latest move will help IBM stay relevant in a world in which cloud-based services have come to dominate the information technology landscape.

    While IBM over the last decade has made a lot of noise about Watson, the company’s cloud-based artificial intelligence software platform, the company has been slow to establish a leadership position in the public cloud, falling behind the market leaders: Amazon.com’s (AMZN) Amazon Web Services, Microsoft’s (MSFT) Azure, and Alphabet’s (GOOGL) Google Cloud Platform.

    https://www.barrons.com/articles/ibm-bet-everything-on-red-hat-in-2019-51577479288

Artificial Intelligence

  • Google AI Beats Doctors at Breast Cancer Detection—Sometimes

    The model is the latest step in Google’s push into health care. The Alphabet Inc. GOOG 0.07% company has developed similar systems to detect lung cancer, eye disease and kidney injury.

    Google and Alphabet have come under scrutiny for privacy concerns related to the use of patient data. A deal with Ascension, the second-largest health system in the U.S., allows Google to use AI to mine personal, identifiable health information from millions of patients to improve processes and care.

    The health data used in the breast-cancer project doesn’t include identifiable information, Google Health officials said, and the data was stripped of personal indicators before given to Google.

    https://www.wsj.com/articles/google-ai-beats-doctors-at-breast-cancer-detectionsometimes-11577901600

  • Illinois says you should know if AI is grading your online job interviews

    It’s not just that we don’t know how these systems work. Artificial intelligence can also introduce bias and inaccuracy to the job application process, and because these algorithms largely operate in a black box, it’s not really possible to hold a company that uses a problematic or unfair tool accountable.

    A new Illinois law — one of the first of its kind in the US — is supposed to provide job candidates a bit more insight into how these unregulated tools actually operate. But it’s unlikely the legislation will change much for applicants. That’s because it only applies to a limited type of AI, and it doesn’t ask much of the companies deploying it.

    Also:

    “It’s hard to feel that that consent is going to be super meaningful if the alternative is that you get no shot at the job at all,” said Rieke. He added that there’s no guarantee that the consent and explanation the law requires will be useful; for instance, the explanation could be so broad and high-level that it’s not helpful.

    https://www.vox.com/recode/2020/1/1/21043000/artificial-intelligence-job-applications-illinios-video-interivew-act

Cloud

  • Amazon Has Long Ruled the Cloud. Now It Must Fend Off Rivals.

    Amazon’s success in the cloud, more recently, has suffered setbacks beyond the lost Pentagon deal. Last year, one of its biggest banking customers, Capital One Financial Corp. , had more than 100 million customer records stolen that were stored on Amazon’s cloud. And more big corporations are turning to other cloud vendors. Some are worried the online retail giant could become a competitor, according to people familiar with the matter. Many large multinationals have longstanding relationships with Microsoft or Oracle, but not with Amazon.

    “What we’re seeing now is there’s another wave of late-adopter customers coming to market. These are customers that have never used cloud before, so they’re investigating,” said Raj Bala, research director at Gartner. “A fair number of these customers will certainly end up at [Microsoft’s] Azure, because they meet that profile: they run a lot of Windows, they tend to want to play it safe, and the decision makers in that camp tend to favor Azure to a large extent.”

    https://www.wsj.com/articles/amazon-has-long-ruled-the-cloud-now-it-must-fend-off-rivals-11578114008

Security/Privacy

  • What California’s New Privacy Law Means for You

    Not everybody will have to comply with the law. The CCPA only applies to companies that earn more than $25 million in gross annual revenue, collect personal data on more than 50,000 users, or make more than 50 percent of their revenue selling user data.

    It’s also worth highlighting that while the bill technically took effect on January 1, California’s Attorney General has stated enforcement isn’t likely to begin until sometime this summer, giving lawmakers some additional time to work out some early kinks, clarify murky language, or water down existing requirements upon lobbyist request. Already we’re seeing that some companies aren’t complying with the law.

    Groups like the Electronic Frontier Foundation say they spent the better part of 2019 trying to keep lobbyists from numerous industries from weakening the bill, since empowered, informed consumers will inevitably opt out of data sales, costing companies billions.

    https://www.vice.com/en_us/article/z3bvyx/what-californias-ccpa-new-privacy-law-means-for-you

Other

  • Former Google human rights chief says he was ‘sidelined’ over censored Chinese search engine

    As Google pushed for deals in authoritarian Saudi Arabia and launched the Google Center for Artificial Intelligence in Beijing, LaJeunesse says, he pushed for a company-wide human rights program that would bring new oversight to product launches. But Google rebuffed the idea, and eventually brought in a colleague to oversee policy issues related to Dragonfly.

    “Just when Google needed to double down on a commitment to human rights,” LaJeunesse writes in the blog post, “it decided to instead chase bigger profits and an even higher stock price.”

    The issues extended to the broader culture within the company as well, according to LaJeunesse. He says, at one point, during an all-hands meeting, his boss at the company suggested Asian employees “don’t like to ask questions.”

    https://www.theverge.com/2020/1/2/21046522/google-china-dragonfly-ross-lajeunesse-human-rights-chief-censorship

    Google has little choice to be evil or not in today’s fractured internet

    Google used to have a lot of agency, which is unfortunately declining very, very rapidly.

    I’ve talked about the fracturing of the internet into different spheres of influence for quite literally years. Countries like China in particular, but also Russia, Iran and others, are seizing more and more exacting control of the internet’s plumbing and applications, subsuming the original internet’s spirit of openness and freedom and placing this communications medium under their iron fists.

    As this fracturing has occurred, companies like Google, or Shutterstock, or even the NBA, have increasingly faced what I’ve called an “authoritarian straddle” — they can either work with these countries and follow the local rules, or they can just get out, with serious ramifications for their home markets.

    https://techcrunch.com/2020/01/02/google-has-little-choice-to-be-evil-or-not-in-todays-fractured-internet/

  • Amazon threatens to fire critics who are outspoken on its environmental policies

    Amazon’s external communications policy “is not new and we believe is similar to other large companies,” company spokeswoman Jaci Anderson said in a statement. In response to whether Amazon was trying to stifle workers, Anderson said employees are “encouraged to work within their teams,” including by “suggesting improvements to how we operate through those internal channels.”

    Tech workers have recently become more outspoken about concerns over their employers’ policies. During a Sept. 20 protest, thousands of Amazon employees walked out and criticized the company’s climate policies and practices. In November 2018, thousands of Google employees walked off the job to protest of the company’s handling of sexual harassment claims. Workers at Google, Amazon and Microsoft have spoken out in criticism of facial-recognition technology from their companies, fearing misuse by law enforcement and other government agencies.

    https://www.washingtonpost.com/technology/2020/01/02/amazon-threatens-fire-outspoken-employee-critics-its-environmental-policies/
    Additional Comments:
    This isn’t a union situation, but it feels similar to when Regan broke the unions in the 80’s. The air traffic controllers thought they couldn’t be replaced… and then Regan replaced them. Those people were barred from air traffic control jobs for years until Clinton granted amnesty.
    https://www.npr.org/2019/12/13/788002965/episode-958-when-reagan-broke-the-unions

Posted on

Supplier Report: 1/3/2020


Photo by Annie Spratt on Unsplash

Big Tech is trying to make good on promises like leaving acquisitions alone and not using your personal data for evil things. But when the pressure to earn rises to unbearable levels, will those words still hold true?

California is trying to hold these companies responsible and give consumers more control over the data collected about them, but will these laws help or confuse an already complicated situation?

Finally, since we are on the topic of privacy, you might want to think twice before sending your cheek swab to one of those DNA companies… there isn’t much governance on what they are (and what the authorities) are doing with that data.

Acquisitions/Investments

  • LinkedIn CEO Jeff Weiner: ‘Satya Has Made Good’ On Microsoft’s Acquisition Agreement

    One of the biggest reasons why Microsoft is taking its time on pushing integrations is to avoid making mistakes. LinkedIn is Microsoft’s largest acquisition to date so it has to move with caution.

    Microsoft wants to avoid making integration mistakes that it made in the past. In 2012, Microsoft had written off the $6.2 billion acquisition of digital ad company aQuantive. And Microsoft also saw a quarterly loss in 2015 due to $8.3 billion in charges related to the restructuring of its phone hardware operations following the $9.5 billion acquisition of the Nokia Devices and Services business.

    Microsoft CFO Amy Hood pointed out that one of the goals of the LinkedIn acquisition was to accelerate the growth of the professional social network along with Office 365 and Dynamics 365.

    https://pulse2.com/linkedin-satya-has-made-good-on-acquisition/

  • Remembering the startups we lost in 2019

    A cursory look at this year’s batch of companies doesn’t find any story quite as spectacular as last year’s big Theranos flameout, which gave us a best-selling book, documentary, podcast series and upcoming Adam McKay/Jennifer Lawrence film. Some, like MoviePass, however, may have come close.

    And for every Theranos, there are dozens of stories of hardworking founders with promising products that simply couldn’t make it to the finish line. There’s also room for debate about what is and isn’t a startup. For our purposes, we’re focusing here on independent startups, not digital initiatives from larger companies — though in at least one case, the startup was acquired by a larger company before shutting down.

    https://techcrunch.com/2019/12/26/startups-lost-in-2019/

Security/Privacy

  • GDPR was just a warmup. CCPA will arrive with a bang.

    “We’ve already talked to some companies who either have decided or are considering to pull their marketing programs from California. So there may be some fallout. It might just be a temporary thing for them to see where the cards fall,” said Rachel Glasser, global chief privacy officer at Wunderman Thompson.

    Even if only temporarily, advertiser pullback would put publishers’ and ad tech companies’ businesses in a bind. But those companies are also facing more permanent predicaments.

    Any company that sells California residents’ personal information under the law’s broad definition of sale is required to put a “clear and conspicuous” link on its homepage titled “Do Not Sell My Personal Information” for people to request the company to stop selling their information.

    https://digiday.com/marketing/gdpr-just-warmup-ccpa-will-arrive-bang/
    What Does California’s New Data Privacy Law Mean? Nobody Agrees

    “Companies have different interpretations, and depending on which lawyer they are using, they’re going to get different advice,” said Kabir Barday, the chief executive of OneTrust, a privacy management software service that has worked with more than 4,000 companies to prepare for the law. “I’ll call it a religious war.”

    The new law has national implications because many companies, like Microsoft, say they will apply their changes to all users in the United States rather than give Californians special treatment. Federal privacy bills that could override the state’s law are stalled in Congress.

    The California privacy law applies to businesses that operate in the state, collect personal data for commercial purposes and meet other criteria like generating annual revenue above $25 million. It gives Californians the right to see, delete and stop the sale of the personal details that all kinds of companies — app developers, retailers, restaurant chains — have on them.

    https://www.nytimes.com/2019/12/29/technology/california-privacy-law.html

  • What You’re Unwrapping When You Get a DNA Test for Christmas

    But is using one of these kits also opening the door to letting the police use your DNA to arrest your cousin? The answer in this rapidly evolving realm depends largely on which sites you join and the boxes you check off when you do. And even if you never join any of these sites, their policies could affect you so long as one of your 800 closest relatives has.
    **
    To identify a suspect’s blood, for example, investigators do not need to find the person who cut his hand smashing through a window. They just need to match to a couple of his second or third cousins in a DNA database. From there, a genetic genealogist can puzzle out how these cousins are related to one another and the suspect by building out a series of family trees. Often this leads to an arrest.

    https://www.nytimes.com/2019/12/22/science/dna-testing-kit-present.html

Infrastructure/Hardware

  • IBM’s Seawater Battery Making Waves

    IBM is essentially announcing a potential alternative to lithium-ion batteries – and not just an alternative to some of the main ingredients. What’s more, IBM states the batteries perform even better than current lithium-ion batteries. Citing greater efficiency, faster charging, as well as higher power and energy density. These batteries are not just environmentally sound, but are also more capable in general. Further adding to their appeal, IBM states they are cheaper to produce thanks to their lack of heavy metals.

    The issue is that they are currently far from being in a finished state. IBM’s announcement does not even suggest the company intends to build the batteries itself. Instead, the collaboration with the other vested companies is intended to flesh out the technology and create an environment where it becomes easier for other companies to produce the seawater-sourced batteries in the future.

    https://screenrant.com/ibm-seawater-battery-tech/

  • Huawei reportedly got by with a lot of help from the Chinese government

    Huawei reportedly had “access to as much as $75 billion in state support,” according to a piece published by The Wall Street Journal on Christmas Day.

    That massive figure is culled from poring over various forms, including grants and tax breaks. Huawei, for its part, isn’t denying any government support, but said in response that what it received was “small and non-material,” in line with the usual variety of grants awarded to tech startups and companies.

    Per WSJ’s accounting of public records, Huawei got around $46 billion in loans and other support, coupled with $25 billion in tax cuts used to accelerate tech advances.

    https://techcrunch.com/2019/12/26/huawei-reportedly-got-by-with-a-lot-of-help-from-the-chinese-government/

Other

  • Accenture: Remaining Bullish And Raising Target Price Post Earnings

    Per our industry-wide analysis and Accenture’s favorable fundamentals, and given the company’s strong top-line growth, we believe that ACN shares merit ~29x P/E multiple on 2019 earnings. When we apply it to our 2019 EPS estimate of $8.65 (up from $8.49), we get the target price of $251 (up from $245). We note that this P/E multiple is contingent on the S&P multiple of ~18x, and may expand/contract together with the multiple.

    Risks:

    While Accenture strives to make the pricing structure attractive to its core clients and, henceforth, attract greater business, we see a number of Indian players, such as Infosys, Tata Consultancy, and Wipro, potentially lowering prices in the foreseeable future. In addition, there are smaller players that are threatening Accenture in Europe, such as Epam and Luxoft.

    The company heavily relies on H1-B and L-1 visas; over the last several years Congress attempts to heavily regulate the number of visa works each company can hire. Should the H1-B and L-1 visas become even more limited, there could be a 40-60 bps negative impact to Accenture’s margin.

    https://seekingalpha.com/article/4314133-accenture-remaining-bullish-and-raising-target-price-post-earnings

  • Uber Co-Founder Travis Kalanick Departs Board, Sells All His Shares

    The exit punctuates a decade in which Silicon Valley investors pumped startups with extraordinary sums of money and granted their founders vast power and a mandate to grow at breakneck speeds.

    Uber and Mr. Kalanick were the archetype of this model, as Mr. Kalanick raised over $14 billion in equity and debt from outside investors who bought into his expansive vision and energetic approach. At its peak, Uber was the most valuable startup in the U.S., with a valuation of about $68 billion.

    The move by Mr. Kalanick to sell his shares was set in place multiple months ago, said people familiar with the matter, and called for him to sell shares daily until his holdings wound down to zero.

    https://www.wsj.com/articles/uber-co-founder-travis-kalanick-to-depart-companys-board-11577196747